RBA Maintains Hawkish Stance on Inflation Amid External Shocks
The Reserve Bank of Australia (RBA) maintains its hawkish stance on inflation despite leaving the cash rate unchanged at its recent meeting. Deputy Governor Andrew Hauser emphasized that external shocks, such as potential fuel cost spikes from the Middle East, and domestic capacity pressures continue to drive inflation.
Hauser cited weak productivity and limited growth as additional factors contributing to inflationary pressures. He warned that if upside risks materialize and inflation doesn't decrease, further rate hikes cannot be ruled out.
The RBA's concerns are reinforced by recent data showing Australia's Wage Price Index for the June quarter 2026 rose 0.8% q/q, lifting annual wage growth to 3.2% y/y, unchanged from Q1 but down slightly from 3.4% y/y in Q2 2025.